On Friday, Singapore unveiled a series of initiatives aimed at revitalizing its equities market. These measures include a 20% tax rebate for primary listings and the establishment of a S$5 billion ($3.74 billion) program dedicated to investing in local stocks.
This announcement provides further details on strategies previously introduced by Singapore’s equities market review group on February 13. The goal of these measures is to boost a stock market that has been facing challenges due to a lack of major listings and reduced trading liquidity.
Chee Hong Tat, Singapore’s Second Finance Minister, emphasized during a briefing on Friday that the intent of these measures is to establish a sustainable and efficient equities market. He expressed optimism that the combined impact of these proposals could be significant.
The Monetary Authority of Singapore (MAS), which formed the review group in August last year and is chaired by Chee, aims to enhance the country’s equities market development. The group revealed that MAS and the Financial Sector Development Fund will introduce the S$5 billion initiative known as the Equity Market Development Program, expected to attract further investment over time.
In the months ahead, MAS plans to assess eligible fund managers and strategies for this program. These funds are required to be actively managed and should invest across various Singaporean companies, rather than solely in index component stocks. Another component of the plan involves refining investment categories for new family office applicants under the Global Investor Program, focusing on equities listed on approved Singapore exchanges. Currently, these categories span from qualifying debt securities to non-listed Singaporean companies, with family office applicants required to invest at least S$50 million.
To entice more listings, the review group proposed additional measures, such as a 20% corporate income tax rebate for new primary listings and a 10% rebate for new secondary listings involving share issuance.
Although Singaporean IPO proceeds reached $152.3 million last year, marking a 37.7% increase from the $110.6 million in 2023, this figure only represented 4.6% of Southeast Asia’s total market share, according to LSEG data. Nonetheless, the market outlook seems promising, with several companies, including Foundation Healthcare Holdings and Nippon Telegraph & Telephone Corp.’s data center real estate investment trust, reportedly considering public offerings in Singapore.
These efforts by Singapore to rejuvenate the domestic stock market, in conjunction with factors like low valuations and attractive dividend yields, prompted analysts at JPMorgan to upgrade Singaporean equities to “overweight” on Wednesday. (Conversion rate: $1 = 1.3368 Singapore dollars)